County declined option to cut payments from $16M to $13M: letter

Peterborough Regional Health Centre

(PETERBOROUGH) Peterborough Regional Health Centre offered Peterborough County a chance to repay its loan early and save about $3 million in interest.
In response to a comment on MyKawartha.com, This Week requested information about potentially renegotiating terms of the loan secured by the hospital based on the County’s financial commitment. The hospital then shared a letter that centred around early repayment of the hospital debt for the new hospital.
The hospital confirms it asked the lender about the County repaying early its outstanding principle of $10.8 million, referencing a bylaw approved by County council with a 25-year payment plan to the hospital.
The letter, dated Dec. 5, states that as of Nov. 29, based on market conditions, it could repay a total of $13 million. This is a drop from the $16 million the hospital has previously said is still outstanding.
According to the letter, the County declined the offer.
Sheridan Graham, the County’s spokesperson on the matter, issued a statement that the County’s first priority has been to sit down the hospital and resolve the issue amicably. When the County tried, it was taken to court, she writes. After that, the hospital’s representatives said they couldn’t discuss the issue further because it was going to court.
She adds the County has always respected that negotiations of this nature are kept confidential. Now the County has to be prudent and present its case to a judge in a venue where the full facts of the case will be aired, she says.
For the past week, Warden J. Murray Jones has said the County has no obligation to pay any interest on the $14.4 million it agreed to pay the hospital.
Back in 2001, the City pledged $14.8 million and the County committed $14.4 million. Rather than take out a loan, the City paid its commitment over five years with money from Peterborough Utilities Corporation.
The County has maintained the bylaw that spells out the County covering its commitment through a 25-year payment plan of $1.2 million annually, was not acted on even though it collected millions of dollars via a special levy earmarked for the hospital.
The County has stated that since the hospital didn’t respond to the County to agree to the plan or set up a detailed financial arrangement, the County started making the payments under the assumption that the hospital didn’t need the payment plan.
The County planned to finish paying the hospital this year.
In the County’s financial statements, the payments were referenced as a 25-year plan until 2010 when it shifted to paying it off in 2012.